Bids From the Back Wall
You are calling a live auction with a simulcast online platform. Lot 44 is an antique desk with a disclosed reserve of $8,000. Bidding starts at $4,000. At $7,200, you say, 'I have $7,500 in the back,' but your clerk sees no raised paddle and no online bid. You are trying to move bidding to the reserve. A floor bidder then bids $7,600. You say 'fair warning,' then announce a phone bid of $8,000 and knock the desk down to the phone bidder. The floor bidder later complains that the $7,500 bid was invented and demands the desk at $7,600. The online platform log shows a maximum prebid of $8,200 that your clerk failed to relay before you knocked down. The consignor is pleased with $8,000.
1. Was the $7,500 bid permissible, and what is the effect of the knock-down to the phone bidder?
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No. A bid must correspond to a real bidder or a disclosed seller bid. Saying 'I have $7,500 in the back' when no one bid is a false or chandelier bid; it misled the floor bidder and artificially pushed bidding toward the reserve. If the $7,500 was a seller bid, it had to be disclosed before the sale. The later $8,000 knock-down is also defective because the online log showed a genuine $8,200 prebid that the clerk failed to relay. Under the UCC-style auction rule, an undisclosed seller bid can let a buyer avoid the sale or take the goods at the last good-faith bid. Here the sale at $8,000 is not a clean sale to the highest genuine bidder.
2. What should you do now to correct the sale and protect the record?
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Preserve the platform log, clerk notes, phone records, and any recording. Do not alter them. Contact the phone bidder and the online prebidder promptly: explain that the $7,500 bid was not real and that the $8,200 prebid was not relayed. The cleanest remedy is to rescind the $8,000 sale, refund the phone bidder, and reopen the desk among genuine bidders with the $8,200 prebid recognized, or negotiate a documented settlement. Notify the consignor in writing. If a board complaint is filed, cooperate and disclose the error. Retrain the clerk on relaying platform bids and require the auctioneer to confirm every bid before knocking down.